Elon Musk, the world’s richest man and CEO of Tesla, made some big claims when he submitted his bid to buy Twitter two weeks ago. The tech magnate said he would “unlock” Twitter’s “extraordinary potential” and transform the company. Well, it apparently seems that some of his grand ideas include charging to embed tweets, which is… not particularly mindblowing.
A new Reuters report published on Friday claimed to provide an inside look into Musk’s negotiations with banks, which are helping fund his $US44 ($61) billion offer to take over Twitter with $US25.5 ($35) billion in loans. According to the report, Musk had to convince banks that Twitter generated enough cash flow to service the loans he was asking for. Reuters cited three anonymous sources familiar with Musk’s dealings with banks.
In his pitch, the billionaire apparently pointed to Twitter’s gross margin, which is lower than other social media giants like Meta, arguing that this meant the company could be run in a more cost-efficient way. He also purportedly said that he would cut the salaries of Twitter’s executives and board in order to bring down costs. In addition, Bloomberg reported on Thursday that Musk mentioned job cuts in his conversations with banks.
The statement on board salaries coincides with what Musk said on the social media network in mid-April when he tweeted that the salary of Twitter board members would be $US0 ($0) if his bid succeeded, a move he says would save the company about $US3 ($4) million per year.
Board salary will be $0 if my bid succeeds, so that’s ~$3M/year saved right there
— Elon Musk (@elonmusk) April 18, 2022
When it comes to making money and developing new features, he reportedly told banks that he would develop “new ways to make money out of tweets that contain important information or go viral,” the outlet noted. Musk purportedly said this could include charging third-party websites for embedding or quoting tweets from verified Twitter accounts.
Meanwhile, Bloomberg stated that another potential idea floated to banks was that influencers and celebrities needed to be more active on the social media network.
The outlet states that the billionaire’s pitch to banks was centered on his “vision” for the company and not a roadmap of commitments. And Musk apparently didn’t offer much detail on his plans for the company.
Overall, the billionaire has provided few specifics in public about his plans for the company apart from his vague pledges to introduce new features, make the social network’s algorithms open-source, get rid of spambots, and authenticate “all humans.” In recent days, he has focused much of his energy on bullying Twitter employees.
As part of the deal, Musk has agreed to come up with $US21 ($29) billion in cash on his own. Late Thursday, the Securities and Exchange Commission published filings revealing that he had sold about $US4 ($6) billion in Tesla stock over two days this week. Selling Tesla stock is one of the ways Musk can round up the money for his end of the deal.
The news of Musk’s acquisition of Twitter hasn’t gone over well at Tesla, which saw its shares tank 12.2% on Tuesday, erasing more than $US125 ($174) billion from its market capitalisation. Investors worry that Tesla’s CEO could become distracted with his new shiny toy or even get into a fight with China over free speech issues. This would not be good for the EV company, which has significant production in the country and also considers it a key market.
Late on Thursday, Musk tweeted that he had no plans to sell any more Tesla stock.
Editor’s Note: Release dates within this article are based in the U.S., but will be updated with local Australian dates as soon as we know more.